Doing Business in the UAE

UNITED ARAB EMIRATES – A BRIEF BACKGROUND

UAE GDP :
USD 525 Billion (Approx)

UAE Population :
9.50 Million Approx.
(15% Local; 85% Expats)

UAE FDI :
USD 30.68 Billion (Ranked first
in FDI inflows in MENA Region)

Total Land Area : 71,023.6
square km (in addition 27,624.9
square km of territorial water).

Official Language: Arabic
Business Language: English
Government correspondence is mainly conducted in Arabic.

The UAE is an Islamic Nation, and the legal system is largely based on Islamic teachings.

WHY UAE?

Strategic Location

UAE is strategically located between Europe, Africa and Asia. It connects potential markets in Asia, Africa, and Europe offering businesses access to a consumer base exceeding almost 2 billion people. Its strategic location offers optimal trading conditions for the UAE and has made UAE a trans-continental trade hub for the rest of the world.

World Class Infrastructure

The UAE is renowned for its world-class infrastructure. From state-of-the-art airports and seaports to advanced telecommunications and transport networks, the infrastructure here supports business operations seamlessly.

OPTIONS FOR DOING BUSINESS IN THE UAE

OPTIONS-1

Without setting up legal entity in the UAE

Directly with UAE customers/clients; or
Via a UAE agent or distributor.

OPTIONS-2

Execution of Projects in the UAE

Fly-in fly-out (to the extent a local license is not required); or
Via a sub-contractor; or
Unincorporated joint venture (with a local or foreign partner).

OPTIONS-3

Execution of Projects in the UAE

There are two main options available to a foreign investor to set up an entity in UAE:
1. set up in ‘onshore’ UAE (Mainland) to undertake business within that emirate and outside the UAE; and
2. set up in one of the Free Zones in the UAE to undertake business within the free zone and outside the UAE.
Note: It is also possible to set up a business presence as an offshore company in Jebel Ali Free Zone (JAFZA) and Ras Al Khaimah International Corporate Centre (RAK ICC). These offshore companies are not permitted to carry out business in the UAE.
The process for establishing a legal entity in the UAE depends on:
1. jurisdiction in which the company is proposed to be established i.e mainland or free zones;
2. type of the legal entity; and
3. nature of its activities.

PROCESS FOR SETTING UP LEGAL ENTITY IN UAE

Application

Submitting an application for Initial Approval

Reservation

Reservation of a Trade Name

Leasing

Arrangement of Lease Agreement (Ejari) for office

Documentation

Submission of the required documents, duly attested, mainly:

Promoter’s constitutional documents e.g. Certificate of Incorporation, MOA/AOA, Shareholding Pattern;
Resolution from Promoter Company for incorporation of the Company;
Resolution for the appointment of Manager;
Ultimate Beneficial Ownership (UBO) Declaration

Registration

Upon the issuance of license, subsequent registration with the Labour Department and Immigration

Onboarding

Submission of works contract for the manager and VISA processing

Note: Once Emirates ID is obtained, bank account opening process to be initiated. Banks in the UAE carry out thorough due diligence process due to stringent AML guidelines prevailing in the UAE.

RECOMMENDED ACTION

UAE carries unparalleled business opportunities however due to availability of multiple options and heavy jurisdictional segmentation, it is highly recommended to have a detailed market entry strategy taking into account:

The proposed business model, products and/or services to be supplied;

The nature and location of target customers and suppliers;

Availability of appropriate licensed activities;

Availability of required infrastructure to cater the proposed business model

The office and employee arrangements.

Disclaimer: All views expressed in this article are solely for informational purposes and should not be construed as legal advice. This information is for reference only and is bound to change in case of any amendments or changes to applicable laws. We do not assume any responsibility or liability for any errors or omissions in the content of this article, and do not make any warranties about the completeness, reliability and accuracy of the information expressed in this article.